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Business and Economics > Public Finance

You are looking at 1 - 10 of 41 items for :

  • Type: Journal Issue x
  • Bahamas, The x
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Cover IMF Staff Country Reports
The Bahamas: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for The Bahamas
International Monetary Fund. Western Hemisphere Dept.
The 2024 Article IV Consultation highlights that The Bahamian economy has staged a remarkable recovery since the pandemic, fueled by a strong rebound in tourism. With economic activity back to pre-Hurricane Dorian levels, growth is slowing—expanding by 1.8 percent in H1 2024—constrained in part by limited hotel capacity. Inflation is now modestly negative, but the cost of living remains high. Activity has recovered to its pre-pandemic level and inflation is now modestly negative. Public finances are improving and borrowing costs have declined. Nonetheless, public debt remains high and its short duration represents an important vulnerability. Reducing the limit on central bank advances to the government and adopting new liquidity management tools would help reduce systemic liquidity. Investing in human capital, closing digitalization gaps, relieving capacity constraints in tourism, and reducing crime would help lift long-term growth. Plans to upgrade the electricity grid and increase the share of renewables would, over the medium term, improve the reliability of the electricity supply, boost growth, and reduce emissions.
Keywords:
CARTAC CARTAC; Bahamian authorities; revenue-enhancing strategy; CARTAC FAD; energy reform plan; Anti-money laundering and combating the financing of terrorism (AML/CFT); External sector statistics; Caribbean; Global
Cover IMF Staff Country Reports
The Bahamas: Selected Issues
International Monetary Fund. Western Hemisphere Dept.
This Selected Issues paper analyzes determinants of sovereign spreads in The Bahamas. In order to analyze Bahamian sovereign spreads, a fundamentals-based model is estimated using data on emerging market economies. Changes in The Bahamas’ sovereign rating correspond closely with significant movements in Bahamian sovereign spreads. Bahamian sovereign spreads have declined since late 2022 and, by 2024, are aligned both with peer economies and the model-implied spread. The main findings are: first, while both domestic and global covariates are important determinants of spreads, a sizeable effect comes from the interaction of global risk aversion and a country’s risk rating. Second, inclusion in the Market Bond Index Global index Emerging is a significant driver for emerging markets. The spreads in The Bahamas would have compressed by 56 basis points compared to other countries with similar fundamentals if the archipelago were included in this index.
Keywords:
quantifying climate; IMF staff calculation; climate change risk; housing affordability; alleviating supply constraint; housing affordability in The bahamas; Climate change; Electricity; Housing; Natural disasters; Global; Caribbean
Cover IMF Working Papers
Central Bank Digital Currencies and Financial Stability: Balance Sheet Analysis and Policy Choices
Romain Bouis
,
Gaston Gelos
,
Fumitaka Nakamura
,
Paavo A Miettinen
,
Erlend Nier
, and
Gabriel Soderberg
This paper offers a comprehensive analysis of the implications for financial stability of a central bank issuing a digital currency to the public at large. We start with a systematic analysis of balance sheet changes that arise from the new liability for the central bank and the banking system, and examine how they depend on preconditions, central bank choices, and banking system responses. Based on this, we discuss the range of implications for financial stability that may arise in steady state, in the context of adoption, and in crisis times. Threats to financial intermediation in steady state arise mainly in situations where the central bank balance sheet expands, and triggers adjustment mechanisms that lead to more costly or less stable funding of the banking system, while in crisis times run risk may increase. Our analysis of policy choices to control these effects considers macroprudential policy, and an expansion of central bank lending to commercial banks, but finds that a main contribution needs to come from a design of the CBDC that encourages its use as a means of payment rather than a store of value.
Keywords:
Central Bank Digital Currency; Financial Stability; Balance Sheets; Disintermediation; Bank Runs; central bank lending; CBDC issuance scenario; market operation; central bank choice; lending to commercial banks; Central Bank digital currencies; Commercial banks; Financial sector stability; Bank credit; Bank deposits; Global; Eastern Europe; Caribbean
Cover Technical Assistance Reports
The Bahamas: Technical Assistance Report-Domestic Local Currency Bond Market Development
International Monetary Fund. Monetary and Capital Markets Department
The Bahamas has a strong foundation for developing the local currency bond market (LCBM), benefitting from macroeconomic stability, and favorable fiscal and borrowing plans. The government views domestic capital market development as crucial for rebuilding economic buffers and fostering financial market development. An IMF/CARTAC a technical assistance mission visited The Bahamas in March 2023 to support the LCBM development. The mission assessed the current stage of the sovereign debt market and formulated policy recommendations for each of the six building blocks outlined in the Guidance Note for Developing Local Currency Bond Markets. Key findings highlighted significant potential to shift funding from non-concessional external borrowing to the domestic bond market, which would facilitate a more robust yield curve and deeper benchmark issuances. The mission’s key recommendations were: • Transition to a competitive auction system, allowing market prices to clear a fixed volume on offer; • Enhance communication with market participants, including through a formal investor relations strategy, and with relevant stakeholders to improve credibility, transparency, and investor appetite; and • Implement reforms sequentially, initially focusing on eliminating the most critical bottlenecks to market development.
Keywords:
investor base; government securities registry; market outcome; market development; Bahamas government securities depository; money market issuance; Government securities; Government debt management; Securities markets; Securities; Treasury bills and bonds; Global
Cover IMF Staff Country Reports
The Bahamas: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for The Bahamas
International Monetary Fund. Western Hemisphere Dept.
The Bahamas is experiencing a tourism-led rebound. Real GDP growth in 2021 was close to 14 percent, as stayover tourist arrivals doubled relative to 2020. The economy is projected to expand by 8 percent in 2022. Nonetheless, it will likely take until 2024 to return to the 2019 level of GDP and the pandemic has given rise to significant human and social costs. The country’s medium-term growth challenges are likely worse than before, and public finances are in a more precarious state. Risks are skewed downwards given a difficult near-term financing situation, rising inflationary—and potentially BOP—pressures because of the war in Ukraine, an ongoing threat from the evolving pandemic, and the country’s high vulnerability to natural disasters.
Keywords:
Bahamian authorities; authorities project; government administration; foreign currency borrowing; IMF's transparency policy; COVID-19; Credit; Global; Caribbean
Cover IMF Staff Country Reports
The Bahamas: Selected Issues
International Monetary Fund. Western Hemisphere Dept.
Selected Issues
Keywords:
IMF's transparency policy; policy option; automatic adjustment mechanism; staff team of the International Monetary Fund; debt buffer; Wages; Pensions; Pension spending; Civil service; Retirement; Caribbean
Cover IMF Working Papers
Growth at Risk from Natural Disasters
Mr. Tamim Bayoumi
,
Mr. Saad N Quayyum
, and
Sibabrata Das
The paper analyzes the impact of natural disasters on per-capita GDP growth. Using a quantile regressions and growth-at-risk approach, the paper examines the impact of disasters and policy choices on the distribution of growth rather than simply its average. We find that countries that have in place disaster preparedness mechanisms and lower public debt have lower probability of witnessing a significant drop in growth as a consequence of a natural disaster, but our innovative methodology in this paper finds that the two policies are complements since their effectiveness vary across different disaster scenarios. While both are helpful for small to mid-size disasters, lower debt—and hence more fiscal space—is more beneficial in the face of very large disasters. A balanced strategy would thus involve both policies.
Keywords:
disaster preparedness; impact of disaster; quantile regression; impact of natural disaster; regression estimator; Natural disasters; Fiscal space; Caribbean
Cover IMF Staff Country Reports
The Bahamas: 2020 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for The Bahamas
International Monetary Fund. Western Hemisphere Dept.
The economic impact of COVID-19 on The Bahamas is unprecedented. The archipelago was just recovering from the devastation of Hurricane Dorian in the fall of 2019, when the pandemic led to a sudden stop in tourism, the main source of income and employment. The authorities mounted a rapid emergency response to support the economy and vulnerable households and put in place strict containment measures. But amid limited testing and health resources, reopening the economy has been challenging.
Keywords:
ISCR; CR; central bank of The Bahamas; IMF staff calculation; asset registry; COVAX Facility; loan moratoria
Cover IMF Working Papers
A Survey of Research on Retail Central Bank Digital Currency
Mr. John Kiff
,
Jihad Alwazir
,
Sonja Davidovic
,
Aquiles Farias
,
Mr. Ashraf Khan
,
Mr. Tanai Khiaonarong
,
Majid Malaika
,
Mr. Hunter K Monroe
,
Nobu Sugimoto
,
Hervé Tourpe
, and
Peter Zhou
This paper examines key considerations around central bank digital currency (CBDC) for use by the general public, based on a comprehensive review of recent research, central bank experiments, and ongoing discussions among stakeholders. It looks at the reasons why central banks are exploring retail CBDC issuance, policy and design considerations; legal, governance and regulatory perspectives; plus cybersecurity and other risk considerations. This paper makes a contribution to the CBDC literature by suggesting a structured framework to organize discussions on whether or not to issue CBDC, with an operational focus and a project management perspective.
Keywords:
WP; CBDC issuance; CBDC arrangement; CBDC holding; cyber-security payment; monetary policy; money; central bank digital currencies; legal tender; payment system; cyber security; user CBDC holding; Currencies; Payment systems; Digital currencies; Legal support in revenue administration; Global; Eastern Europe; Pacific Islands; Caribbean; policy risk; CBDC pilot; CBDC payment system; CBDC transaction; cash currency management function; platform implementation decision; CBDC platform
Cover IMF Staff Country Reports
The Bahamas: Request for Purchase under the Rapid Financing Instrument-Press Release; Staff Report; and Statement by the Executive Director for The Bahamas
International Monetary Fund. Western Hemisphere Dept.
This paper highlights The Bahamas’ Request for Purchase Under the Rapid Financing Instrument (RFI). The coronavirus disease 2019 (COVID-19) pandemic comes on the heels of the widespread destruction caused by Hurricane Dorian in September 2019. Coupled with domestic containment measures, the collapse in tourism will cause a deep recession. The Bahamian authorities have taken timely and targeted measures to boost health spending and mitigate the socioeconomic impact of the pandemic, supporting jobs and vulnerable segments of the population. The disbursement under the RFI will help boost resources for essential COVID-19-related outlays, strengthen reserves, and catalyze additional support from other international financial institutions, development partners, and the private sector. In order to address the urgent fiscal needs, the central bank will on-lend the disbursement to the Ministry of Finance. The IMF staff is confident that the authorities will pursue appropriate policies for alleviating the impact of the pandemic, based on the country’s strong track record. The Bahamas is assessed to have sustainable debt and adequate capacity to repay the IMF.
Keywords:
ISCR; CR; government of The Bahamas; foreign exchange market outlook; Dorian; financial support; request for emergency; reform agenda; Executive Board's discussion of The Bahamas; hurricane expenditure; revenue collection; Credit; COVID-19; Loans; International reserves; Global; Caribbean